Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria, has expressed confidence that the apex bank’s current efforts will result in inflation rates falling below the 17 percent projected by the International Monetary Fund, IMF, in 2023.
This was stated by Emefiele during a media interview at the ongoing IMF/World Bank meeting.
The IMF in its October World Economic Outlook released during the ongoing Annual Meetings of the World Bank and IMF had projected inflation rate to fall 17 per cent in 2023 due to the four percentage increase in the Monetary Policy Rate, MPR, by the CBN.
Speaking at the October WEO press briefing held on the sidelines of the ongoing IMF/World Bank annual meetings, in Washington DC,Daniel Leigh, Divisional Chief, Research Department, IMF, said: “For Nigeria, in particular, we forecast inflation at about 19 per cent this year, but then some moderation next year down to 17 per cent, and part of that does reflect the monetary policy actions which is the 4.0 per cent point increase in Nigeria’s Central Bank as well as the decline that we expect in oil and food prices globally.”
Responding to the IMF projection and commendation for the interest rate hike by the CBN, Emefiele said: “ I must say that even at these meetings, it is very clear that inflation risk is heavily elevated and for us, in Nigeria, we believe that inflation at 20.5 per cent in the month of September is a very high one and that is why you have seen that monetary policy had taken some very stern positions to aggressively tighten not just through monetary policy rate but also by tightening by seeing to how we could take liquidity out of the vaults of the bank.”
“We are delighted that people are beginning to see that this tightening effort would yield results. 17 per cent looks good but we believe that with what we are doing at the monetary policy we believe that our tightening effort would help to control demand and effectively lead to a further reduction below 17 per cent.”
On the commendation by the IMF on the CBN’s monetary policies, he added: “It is really very heartwarming because they have seen that we are doing something that is in line with what the global central banks are doing in the area of tackling inflation. it is heartwarming and we can only continue to do what we are doing because it would give us the confidence to know that the action, we are taking is actually going to yield results and we can only continue to push in that direction.”
Exchange Rate Unification
Speaking on calls for exchange rate unification by the World Bank President, David Malpass, Emefiele said: “At every point when we come into these meetings sometimes, they tell us to go back home and adopt our home-grown policies. We cannot be accused of not doing what they want which is to take decisions on how to handle the exchange rate management but at different times, you have to think of at what point will you take those decisions. We are going to be looking at them and even be thinking of the right time to do what they are suggesting, otherwise if you do it exactly when they want, it may turn out to be very hurtful to the Nigerian economy.